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Venus Protocol, a leading Decentralized Finance (DeFi) platform on BNB Chain, has fully restored its functionality following a phishing attack that compromised a user's wallet and resulted in a loss of $13.5 million.
The platform assured that the impacted assets would be recovered and all services restored before September 2, 2025. Venus Protocol's response to the breach shows its focus on securing the necessary funds and restoring platform operations.
Venus Protocol suffered a breach on September 2, 2025, due to a phishing attack that enabled an unauthorized user to drain assets out of a wallet. Blockchain security company PeckShield first reported the attack with an estimated loss of $27 million.
However, after considering the victim's debt position, PeckShield revised this figure to $13.5 million. The attacker gained control through a rogue transfer, sending tokens such as vUSDT and vUSDC to an unfamiliar address.
According to cybersecurity companies Cybers and CertiK, the breach was a result of phishing and not a bug in Venus Protocol's smart contracts. Although it was a significant loss, the attack did not impact any other users on the platform or its functionality, and Venus Protocol was also able to restore operations quickly.
Venus Protocol responded by suspending its services promptly to prevent further losses. Afterwards, it launched a four-step recovery plan that included restoring partial functionality, recovering assets, conducting a thorough security review, and fully restoring all services. The community supported these measures, and the protocol successfully recovered the stolen funds with the platform's protection.
The hack has highlighted concerns about safety in DeFi platforms, especially against the backdrop of phishing attacks, which have now emerged as a major concern in the sector. Chainalysis states that close to 20% of the $2.17 billion in crypto losses reported in 2025 are due to phishing schemes. Venus Protocol has decided to conduct a post-mortem analysis to gain insights into preventing future incidents.
Venus Protocol plays a key role in the BNB Chain's DeFi ecosystem. When the breach occurred, its total value locked (TVL) was approximately $2.7 billion. It continues to be one of the top DeFi money markets, enabling lending, borrowing, and stablecoin issuance on the network.
The breach has also sparked a discussion about the balance between decentralization and user protection on DeFi platforms. Some users have commended the expediency with which Venus Protocol responded to recover the funds. However, others have expressed concerns over the centralisation of power, especially where the platform can freeze operations and impose forced liquidations.
The Venus Protocol breach incident illustrates the persistent issue faced by DeFi platforms in ensuring both the principles of security and decentralization.
Also Read: SpyCloud Analysis Reveals 94% of Fortune 50 Companies Have Employee Data Exposed in Phishing Attacks
